How companies calculate their greenhouse gas emissions

More and more companies calculate their carbon footprint, but this result — measured in terms of tons of greenhouse gases emitted into the atmosphere — can vary depending on the method and scope chosen.

Carbon accounting companies are continuously growing with so much demand. The cost can range from a few hundred euros for a small or medium-sized business to several hundred thousand dollars.

Given the magnitude of the task of reducing emissions and the risks of “greenwashing” (fake claims, false or incomplete, about achievements in the area of ​​sustainability) by companies, experts emphasize the importance of knowing the steps of the calculation.

preliminary steps

The calculation of an emissions balance can be a —legal or commercial— obligation or a voluntary measure.

Pending the elaboration of a universal standard, there are three main methodologies, developed in the early 2000s and they are compatible with each other, despite some differences:

1) the GHG Protocol (United States),

2) the Carbon Balance (France),

3) the ISO 14067 (international) standard

They classify emissions by sectors.

Point No. 1 is emissions directly linked to the company’s activities (such as burning of material, vehicle fleet, etc.).

Number 2 are those linked to the production of consumed energy (electricity, heat/cold).

Number 3 are those indirectly linked to production, both in relation to the inputs and activities necessary for production (purchase of goods and services, transport, real estate, professional travel, investments) and those that occur after the product is ready (such as waste , useful life of the products and what is done after disposal).

Legal obligations refer only to points 1 and 2, but “limiting yourself to them is equivalent to losing 70% of your impact”, says Fanny Fleuriot, carbon accounting coordinator at the Environment and Energy Control Agency (Ademe ).

According to her, point 3 often concentrates the majority of emissions.

“We started with a meeting to understand the company’s economic model”, explains Amélie Klein, specialist in carbon quantification at EcoAct.

Companies define the year on which to base reduction targets—often the first balance sheet year— and scope.

additions and multiplications

Data collection then begins, which can take several months. Invoices for purchases and electricity, property records, machinery and vehicles, employee travel: the list of information is long.

The customer can directly provide energy consumption in kWh, but when exact volumes are not available for all emission sources, sector averages can be used, Klein says.

For emissions related to the use of a product, for example, a vacuum cleaner company may know the life and consumption of its model or use the average consumption of a vacuum cleaner.

The data, expressed in volume (tons, kWh) or in monetary value, are then multiplied by the corresponding emission factor, calculated by specialized entities.

For example, the number of tons of steel purchased is multiplied by the emission factor corresponding to the production of one ton of steel. The result is equivalent in tons of CO2.

And then?

The next step is the establishment of emission reduction targets and the training of teams accordingly.

To measure progress, it is necessary to repeat the calculation, but also to refine it, as emission factors and scope may vary. For example, there may be changes in suppliers, processes or mergers or acquisitions.

To get as close to reality as possible, the company can abandon sectoral averages and include the actual emissions of its suppliers.

This is the challenge for the coming years: a standardized system of carbon data, transmitted along the value chain with the same rigor as accounting data, says Karthik Ramanna, professor at Oxford,